As Artificial Intelligence reshapes business operations, legal advisers say companies must address new risks across recruitment, finance, cybersecurity, logistics, and customer service. Karen Painter Randall of Connell Foley LLP notes that Artificial Intelligence fosters innovation and efficiency while introducing “complex legal considerations” that require training, tools, and operational safeguards. Steven Teppler of Mandelbaum Barrett highlights implications for data governance, transparency, and protection of proprietary algorithms and training data as companies scale their use of these technologies.
Experts emphasize establishing a written Artificial Intelligence use policy and communicating it to employees. The article cites risks from employees using public tools such as ChatGPT and references the 2023 Samsung code leak as an example of inadvertent exposure of proprietary information. Nick Duston recommends that policies clarify what data may be exposed to Artificial Intelligence, set protocols for verifying AI-generated content to avoid hallucinations, require disclosure when content is AI-generated, and restrict use to vetted tools that mitigate data security risks.
Contract terms and ownership of inputs and outputs are central to mitigating risk. Wendi Uzar advises businesses to confirm that an Artificial Intelligence tool will not share a company’s information and to demand deletion of search queries and inputs within a specified timeframe. She also warns that AI-generated marketing or legal content can reproduce false or copyrighted material, and that website terms and conditions can create enforceable claims to protect material used to train models. Several pending district court cases are noted as creating uncertainty about outcomes.
Vendors and outside service providers are another focus. Teppler describes phone vendors using Artificial Intelligence to analyze voicemails, which can raise HIPAA or state-law concerns such as the New York Shield Act and New Jersey Data Privacy Act. Randall recommends multidisciplinary counsel-legal, business, and technology leaders-to identify blind spots and implement governance frameworks, risk assessments, bias audits, vendor contract reviews, incident response protocols, and employee education to balance innovation with protection.
